EX-99.1 2 y37791exv99w1.htm EX-99.1: PRESS RELEASE EX-99.1
 

Exhibit 99.1
For Release on August 2nd, 2007
TOWN SPORTS INTERNATIONAL HOLDINGS, INC. ANNOUNCES SECOND QUARTER 2007 FINANCIAL RESULTS
•   Second quarter 2007 total revenue increased 9.4% to $119.8 million versus $109.5 million in second quarter 2006.
 
•   Second quarter 2007 operating income increased 20.8% to $16.4 million versus $13.6 million in second quarter 2006.
 
•   Second quarter 2007 earnings per share were $0.24 compared to a loss per share of $0.13 in second quarter 2006.
New York, NY — August 2, 2007 — Town Sports International Holdings, Inc. (“TSI” or the “Company”) (NASDAQ: CLUB), a leading owner of health clubs located primarily in major cities from Washington, DC north through New England, operating under the brand names New York Sports Clubs, Boston Sports Clubs, Washington Sports Clubs and Philadelphia Sports Clubs, announced its results for the quarter ended June 30, 2007.
Robert Giardina, Chief Executive Officer of TSI, commented: “I am pleased to report that we had a good second quarter, which keeps us on track for achieving our guidance for 2007. On August 1, we opened our sixth club for 2007 and have an additional nine clubs under construction planned to open during the remainder of the year. Our ancillary and other non-membership revenues continue to build as a percentage of total revenues over the prior year, with our focus on personal training and other services, helping to drive that component of our business.”
Quarter ended June 30, 2007 Financial Highlights:
Revenue (in $’000s) was comprised of the following:
                                 
    Three Months Ended June 30,  
    2006     2007  
Membership dues
   $ 86,764       79.3 %   $ 93,818       78.3 %
Initiation fees
     2,321       2.1 %     3,096       2.6 %
 
                        
Membership revenue
     89,085       81.4 %     96,914       80.9 %
 
                        
Personal training revenue
     13,084       11.9 %     15,482       12.9 %
Other ancillary club revenue
     5,490       5.0 %     5,732       4.8 %
 
                        
Ancillary club revenue
     18,574       16.9 %     21,214       17.7 %
 
                        
Fees and other revenue
     1,810       1.7 %     1,650       1.4 %
 
                        
Total revenue
   $ 109,469       100.0 %   $ 119,778       100.0 %
 
                        
Total revenue for Q2 2007 grew 9.4% to $119.8 million from $109.5 million in Q2 2006. The increase in revenue was driven by growth in membership revenue and ancillary club revenue.
  •   Membership revenue for Q2 2007 grew 8.8% to $96.9 million from $89.1 million in Q2 2006.
 
  •   Ancillary club revenue for Q2 2007 grew 14.2% to $21.2 million from $18.6 million in Q2 2006.
 
  •   Comparable club revenue increased 5.7% during Q2 2007. Of this 5.7% increase, 2.9% was due to an increase in membership, 0.8% was due to an increase in price and 2.0% was due to an increase in ancillary club revenue and fees and other revenue.
Total operating expenses increased 7.8% to $103.4 million in Q2 2007 compared to $95.9 million in Q2 2006.
  •   Payroll and related expenses increased 9.8% or $4.0 million to $44.6 million in Q2 2007 compared to $40.6 million in Q2 2006, much in line with revenue growth.
  •   Payroll costs directly related to the Company’s personal training, group fitness training, and programming for children increased $1.4 million or 14.7%, due to increased demand for these programs.
  •   Club operating expenses increased 3.1% or $1.1 million to $37.9 million in Q2 2007 compared to $36.8 million in Q2 2006.
  •   Rent and occupancy expenses increased $1.9 million. Rent and occupancy expenses at clubs that opened after April 1, 2006 or that are currently being constructed increased $1.6 million.

 

 

  •   Advertising and marketing expenses decreased $1.8 million, as we expended $1.7 million in Q2 2007 compared to $3.5 million in Q2 2006, primarily due to a shift in the timing of our advertising plans.
 
  •   As part of a customer service initiative, we outsourced towel laundry service in 42 clubs as of June 30, 2007, as compared to 20 clubs at June 30, 2006. As our clubs have become more intensely clustered in our markets, and member cross usage becomes more prevalent, we have found it increasingly necessary to offer towel laundry service at more of our clubs. Accordingly, we experienced a $492,000 increase in laundry expenses during Q2 2007 compared to Q2 2006.
  •   General and administrative expenses were $9.1 million in Q2 2007 compared to $8.1 million in Q2 2006.
  •   Corporate rent increased $474,000 primarily due to the relocation of our corporate headquarters in the beginning of June 2007. The costs for the remainder of the lease obligation of the vacated location were recorded in Q2 2007.
  •   The remaining increase in general and administrative expenses is due to increased costs to support the growth in our business in 2007.
      In Q2 2006, the Company incurred $1.1 million of costs related to the examination of strategic and financing alternatives, while no such costs were incurred in Q2 2007.
 
  •   Depreciation and amortization expenses increased $1.3 million to $11.7 million in Q2 2007 from $10.4 million in Q2 2006, principally due to new and expanded clubs.
 
  •   Loss on extinguishment of debt totaled $8.7 million in Q2 2006 related to the early redemption of $85.0 million of outstanding principal of the 9 5/8% Senior Notes.
 
  •   The Company recorded an income tax provision of $4.4 million in Q2 2007 compared to a benefit of $1.7 million in Q2 2006.
Net income in Q2 2007 was $6.4 million compared to a net loss of $2.7 million in Q2 2006.
EBITDA in Q2 2007 increased 17.0% to $28.6 million from $24.5 million in Q2 2006. As a percentage of total revenue, EBITDA margin was 23.9% in Q2 2007, compared to 22.3% in Q2 2006. Please refer to the reconciliation of net income (loss) to EBITDA at the end of this release.

 

 

Six Months Ended June 30, 2007 Financial Highlights:
Revenue (in $’000s) was comprised of the following:
                                 
    Six Months Ended June 30,  
    2006     2007  
Membership dues
   $ 169,903       79.6 %   $ 184,802       78.6 %
Initiation fees
     4,252       2.0 %     5,979       2.5 %
 
                        
Membership revenue
     174,155       81.6 %     190,781       81.1 %
 
                        
Personal training revenue
     25,352       11.9 %     29,403       12.5 %
Other ancillary club revenue
     11,075       5.2 %     12,284       5.2 %
 
                        
Ancillary club revenue
     36,427       17.1 %     41,687       17.7 %
 
                        
Fees and other revenue
     2,913       1.3 %     2,687       1.2 %
 
                        
Total revenue
   $ 213,495       100.0 %   $ 235,155       100.0 %
 
                        
Total revenue for the six months ended June 30, 2007 grew 10.1% to $235.2 million from $213.5 million in the same period in 2006. The increase in revenue was driven by growth in membership revenue and ancillary club revenue.
  •   Membership revenue in the six months ended June 30, 2007 grew 9.5% to $190.8 million from $174.2 million in the same period in 2006.
 
  •   Ancillary club revenue in the six months ended June 30, 2007 grew 14.4% to $41.7 million from $36.4 million in the same period in 2006.
 
  •   Comparable club revenue increased 6.7% during the six months ended June 30, 2007. Of this 6.7% increase, 3.7% was due to an increase in membership, 0.9% was due to an increase in price and 2.1% was due to an increase in ancillary club revenue and fees and other revenue.
Total operating expenses increased 8.9% or $16.8 million to $206.3 million in the six months ended June 30, 2007 compared to $189.5 million in the same period in 2006.
  •   Payroll and related expenses increased 9.6% or $7.8 million to $89.3 million in the six months ended June 30, 2007 compared to $81.5 million during the same period in 2006.
  •   Payroll costs directly related to the Company’s personal training, group fitness training, and programming for children increased $2.3 million or 12.4%, due to increased demand for these programs.
 
  •   Operating expenses in the six months ended June 30, 2006 included a charge relating to severance paid to our former Chairman and certain employees who agreed to severance packages totaling $1.6 million. The total costs of these severance packages were recorded in Q1 2006 while no comparable costs were incurred in the six months ended June 30, 2007.
  •   Club operating expenses increased 8.5% or $6.0 million to $77.3 million in the six months ended June 30, 2007 compared to $71.3 million in the same period in 2006.
  •   Rent and occupancy expenses increased $4.2 million. Rent and occupancy expenses at clubs that opened after January 1, 2006 or that are currently being constructed increased $3.5 million.
 
  •   Advertising and marketing expenses decreased $750,000, as we expended $5.0 million in the six months ended June 30, 2007 compared to $5.7 million in the same period in 2006 primarily due to a shift in the timing of our advertising plans.
 
  •   As part of a customer service initiative, we outsourced towel laundry service in 42 clubs as of June 30, 2007, as compared to 20 clubs at June 30, 2006. As our clubs have become more intensely clustered in our markets, and member cross usage becomes more prevalent, we have found it increasingly necessary to offer towel

 

 

      laundry service at more of our clubs. Accordingly, we experienced a $1.1 million increase in laundry expenses during the six months ended June 30, 2007 compared to the six months ended June 30, 2006.
  •   General and administrative expenses were $16.9 million in the six months ended June 30, 2007 compared to $16.0 million in the same period in 2006.
  •   Corporate rent increased $536,000 primarily due to the relocation of our corporate headquarters in the beginning of June 2007. The costs for the remainder of the lease obligation of the vacated location were recorded in Q2 2007.
  •   The remaining increase in general and administrative expenses is due to increased costs to support the growth in our business in 2007.
      In the six months ended June 30, 2006, the Company incurred $1.7 million of costs related to the examination of strategic and financing alternatives, while no such costs were incurred in the six months ended June 30, 2007.
 
  •   Depreciation and amortization expenses increased $2.0 million to $22.8 million in the six months ended June 30, 2007 from $20.8 million in the same period in 2006, principally due to new and expanded clubs.
 
  •   Loss on extinguishment of debt totaled $12.5 million in the six months ended June 30, 2007. The 2007 loss was due to the early termination fees, deferred financing costs written-off, and associated fees related to the tender offer and early redemption of the remaining $170.0 million of outstanding principal of the 9 5/8% Senior Notes issued by our wholly owned subsidiary Town Sports International, LLC (“TSI LLC”). Loss on extinguishment of debt totaled $8.7 million in the six months ended June 30, 2006 related to the early redemption of $85.0 million of outstanding principal of the 9 5/8% Senior Notes.
 
  •   The Company recorded an income tax provision of $1.8 million in the six months ended June 30, 2007 compared to a benefit of $664,000 in the same period in 2006. In the six months ended June 30, 2006, an income tax charge totaling $751,000 was recorded to reflect the reduction in state tax assets that we believed were not more likely than not to be realized in association with the interest related to the pay-down of debt, resulting from the Company’s use of the proceeds from its initial public offering, which was consummated on June 7, 2006.
Net income in the six months ended June 30, 2007 was $2.6 million compared to a net loss of $2.8 million in the same period in 2006.
EBITDA in the six months ended June 30, 2007 increased 15.0% to $52.6 million from $45.7 million in the same period in 2006. As a percentage of total revenue, EBITDA margin was 22.4% in the six months ended June 30, 2007, compared to 21.4% in 2006. Please refer to the reconciliation of net loss to EBITDA at the end of this release.
Cash flow from operations in the six months ended June 30, 2007 decreased $248,000 or 0.5% to $48.2 million from $48.4 million in the same period in 2006.
Cash used in investing activities increased $16.1 million or 62.1% to $42.1 million in the six months ended June 30, 2007 from $26.0 million in the same period in 2006.
Cash provided by financing activities in the six months ended June 30, 2007 totaled $4.0 million compared with cash used in financing activities of $2.4 million in the same period in 2006.
The Company will hold a conference call on Thursday, August 2, 2007 at 5:00 PM (Eastern) to discuss the second quarter 2007 results. Robert Giardina, Chief Executive Officer, and Richard Pyle, Chief Financial Officer, will host the conference call. The conference call will be Web cast and may be accessed via the Company’s Investor Relations section of its Website at www.mysportsclubs.com. A replay and transcript of the call will be available via the Company’s Website beginning August 3, 2007.

 

 

2007 Business Outlook:
Based upon the current business environment, our performance during the first half of 2007 and current trends in our market, we currently expect the following results for the remainder of 2007, subject to risks and uncertainties in any forward-looking statements including risk factors identified in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006:
As of June 30, 2007, we opened 4 new clubs during 2007 and expect to open another 11 clubs during the remainder of 2007. We expect total revenue for 2007 to be in the range of $475.0 million to $480.0 million, representing 10% to 11% growth over 2006, driven by club membership and ancillary revenue growth, the maturation of recently opened clubs, as well as new clubs to be opened during 2007.
We expect net income to be between $13.7 million and $14.7 million for 2007, when compared with 2006 net income of $4.6 million. The net income for 2007 will be arrived at after a total charge of approximately $12.5 million for early extinguishment of debt before corporate income taxes, or $7.4 million after corporate income taxes. As set forth below, the Company expects net income to be between $21.1 million and $22.1 million without the after-tax effects of these debt extinguishment costs. The Company expects earnings per share (“EPS”) of between $0.51 and $0.55 per share for the year, which includes an after-tax amount of $0.28 per share in connection with the early extinguishment of debt, or between $0.79 and $0.83 per share before the early debt extinguishment charges on an after-tax basis, unchanged from previous guidance.
                                                         
                     
      Six Months     Six Months                                    
      Ended     Ended                 Year-ended     Year Ending 2007    
      June 30, 2006     June 30, 2007                 2006     Guidance    
All figures in thousands, except share data                                         Between     And    
 
                                                        
Revenue
     $ 213,495     $ 235,155             $ 433,080     $ 475,000     $ 480,000    
 
                                              
 
                                                        
Net income (loss)
     $ (2,787 )   $ 2,565                 $ 4,647     $ 13,700     $ 14,700    
Loss on extinguishment of debt, net of effect of taxes
       5,114       7,387                   9,507       7,400       7,400    
Net non-recurring tax (benefit) provision (1)
       751       —                   (1,221 )     —       —    
 
                                              
Net income before loss on extinguishment of debt and non-recurring tax (benefit) provision
     $ 3,078     $ 9,952                 $ 12,933     $ 21,100     $ 22,100    
 
                                              
Fully diluted share count (2)
       19,783,564       26,572,355                   23,154,812       26,650,000       26,650,000    
                     
  (1)   The net non-recurring tax benefit in 2006 represents the $2.0 million non-recurring deferred tax benefit recorded in the fourth quarter of 2006, net of the $751,000 nonrecurring income tax charges in the first and second quarters of 2006. The Company estimates that its normalized effective tax rate for 2007 will be between 40.0% and 42.0%.
 
  (2)   Net income before loss on extinguishment of debt and non-recurring tax (benefit) provision totaled $3.1 million for the six months ended June 30, 2006. On this adjusted basis, common stock equivalents included in the fully diluted share count above for the six months ended June 30, 2006 above was 283,145.

 

 

About Town Sports International Holdings, Inc.:
Town Sports International Holdings, Inc. and Subsidiaries owned and operated 150 fitness clubs and partly owned and operated two additional clubs as of June 30, 2007. The Company operated 103 clubs in the New York metropolitan market, 21 clubs in the Boston market, 18 clubs in the Washington, D.C. market, seven clubs in the Philadelphia market and three clubs in Switzerland. These 152 clubs collectively served approximately 478,000 members. For more information on TSI visit http://www.mysportsclubs.com.
Town Sports International Holdings, Inc., New York
Contact Information:
Investor Contact:
(212) 246-6700 extension 1650
Investor.relations@town-sports.com
or
Integrated Corporate Relations, Joseph Teklits
(203) 682-8258
joseph.teklits@icrinc.com

 

 

TOWN SPORTS INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, 2006 and June 30, 2007
(All figures in $’000s)
(Unaudited)
                 
    December 31,     June 30,  
    2006     2007  
 
                
ASSETS
                
 
                
Current assets:
                
Cash and cash equivalents
   $ 6,810     $ 16,856  
Accounts receivable, net
     8,028       9,329  
Inventory
     435       394  
Prepaid expenses and other current assets
     14,757       14,949  
 
            
Total current assets
     30,030       41,528  
Fixed assets, net
     281,606       298,227  
Goodwill
     50,112       50,099  
Intangible assets, net
     922       671  
Deferred tax asset, net
     32,437       38,708  
Deferred membership costs
     15,703       16,754  
Other assets
     12,717       12,820  
 
            
Total assets
   $ 423,527     $ 458,807  
 
            
 
                
LIABILITIES AND STOCKHOLDERS’ DEFICIT
                
 
                
Current liabilities:
                
Current portion of long-term debt
   $ 181     $ 1,967  
Accounts payable
     9,972       9,745  
Accrued expenses
     33,220       32,200  
Accrued interest
     3,466       891  
Corporate income taxes payable
     2,577       3,627  
Deferred revenue
     38,980       44,711  
 
            
Total current liabilities
     88,396       93,141  
Long-term debt
     280,948       299,618  
Deferred lease liabilities
     54,929       58,364  
Deferred revenue
     5,807       5,976  
Other liabilities
     11,276       13,853  
 
            
Total liabilities
     441,356       470,952  
Commitments and contingencies
     —       —  
Stockholders’ deficit:
                
Class A voting common stock
     26       26  
Paid-in capital
     (21,068 )     (17,937 )
Accumulated other comprehensive income (currency translation adjustment)
     539       527  
Retained earnings
     2,674       5,239  
 
            
Total stockholders’ deficit
     (17,829 )     (12,145 )
 
            
Total liabilities and stockholders’ deficit
   $ 423,527     $ 458,807  
 
            

 

 

TOWN SPORTS INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the three and six months ended June 30, 2006 and 2007
(All figures in $’000s except share and per share data)
(Unaudited)
                                 
    Three Months Ended June 30,     Six Months Ended June 30,  
    2006     2007     2006     2007  
 
                                
Revenues:
                                
Club operations
   $ 107,659     $ 118,128     $ 210,582     $ 232,468  
Fees and other
     1,810       1,650       2,913       2,687  
 
                        
 
     109,469       119,778       213,495       235,155  
 
                        
Operating Expenses:
                                
Payroll and related
     40,591       44,563       81,487       89,314  
Club operating
     36,781       37,938       71,251       77,302  
General and administrative
     8,106       9,122       15,967       16,880  
Depreciation and amortization
     10,400       11,731       20,786       22,822  
 
                        
 
     95,878       103,354       189,491       206,318  
 
                        
Operating Income
     13,591       16,424       24,004       28,837  
Loss on extinguishment of debt
     8,667       —       8,667       12,521  
Interest expense
     10,395       6,393       21,083       13,409  
Interest income
     (662 )     (279 )     (1,387 )     (538 )
Equity in the earnings of investees and rental income
     (475 )     (482 )     (908 )     (904 )
 
                        
Income (loss) before provision (benefit) for corporate income taxes
     (4,334 )     10,792       (3,451 )     4,349  
Provision (benefit) for corporate income taxes
     (1,682 )     4,426       (664 )     1,784  
 
                        
Net income (loss)
   $ (2,652 )   $ 6,366     $ (2,787 )   $ 2,565  
 
                        
 
                                
Earnings (loss) per share:
                                
Basic
   $ (0.13 )   $ 0.24     $ (0.14 )   $ 0.10  
Diluted
   $ (0.13 )   $ 0.24     $ (0.14 )   $ 0.10  
Weighted average number of shares used in calculating earnings (loss) per share:
                                
Basic
     20,660,229       26,142,383       19,500,419       26,070,219  
Diluted
     20,660,229       26,656,341       19,500,419       26,572,355  

 

 

TOWN SPORTS INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six months ended June 30, 2006 and 2007
(All figures in $’000s)
(Unaudited)
                 
    Six Months  
    Ended June 30,  
    2006     2007  
Cash flows from operating activities:
                
Net income (loss)
   $ (2,787 )   $ 2,565  
 
            
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
                
Depreciation and amortization
     20,786       22,822  
Non-cash interest expense on Senior Discount Notes
     8,398       6,029  
Loss on extinguishment of debt
     8,667       12,521  
Amortization of debt issuance costs
     815       443  
Noncash rental expense, net of noncash rental income
     (42 )     886  
Compensation expense incurred in connection with stock options
     574       355  
Net changes in certain operating assets and liabilities
     13,771       4,860  
Increase in deferred tax asset
     (3,782 )     (6,271 )
Landlord contributions to tenant improvements
     3,271       3,686  
Increase in reserve for self-insured liability claims
     1,551       1,304  
Increase in deferred membership costs
     (2,901 )     (1,051 )
Other
     86       10  
 
            
Total adjustments
     51,194       45,594  
 
            
Net cash provided by operating activities
     48,407       48,159  
 
            
Cash flows from investing activities:
                
Capital expenditures
     (26,004 )     (42,142 )
 
            
Net cash used in investing activities
     (26,004 )     (42,142 )
 
            
Cash flows from financing activities:
                
Proceeds from New Credit Facility
     —       185,000  
Costs related to issuance of New Credit Facility
     —       (2,634 )
Repayment of Senior Notes
     (85,001 )     (169,999 )
Premium paid on extinguishment of debt and related costs
     (7,072 )     (9,309 )
Proceeds from initial public equity offering, net of underwriting discounts and offering costs
     91,796       —  
Repayment of long term borrowings
     (742 )     (575 )
Change in book overdraft
     (986 )     (1,230 )
Repurchase of common stock
     (433 )     —  
Excess tax benefit from stock option exercises
     —       1,036  
Proceeds from exercise of stock options
     85       1,740  
 
            
Net cash provided by (used in) financing activities
     (2,353 )     4,029  
 
            
Net increase in cash and cash equivalents
     20,050       10,046  
Cash and cash equivalents at beginning of period
     51,304       6,810  
 
            
Cash and cash equivalents at end of period
   $ 71,354     $ 16,856  
 
            
 
                
Summary of change in certain operating assets and liabilities:
                
Increase in accounts receivable
   $ (877 )   $ (2,322 )
Decrease (increase) in inventory
     (123 )     41  
(Increase) decrease in prepaid expenses and other current assets
     650       (1,207 )
(Decrease) increase in accounts payable, accrued expenses and accrued interest
     1,779       1,396  
Change in prepaid corporate income taxes and corporate income taxes payable
     3,015       1,050  
Increase in deferred revenue
     9,327       5,902  
 
            
Net changes in certain operating assets and liabilities
   $ 13,771     $ 4,860  
 
            

 

 

TOWN SPORTS INTERNATIONAL HOLDINGS, INC. AND SUBSIDIARIES
Reconciliation of Net Income (loss) to EBITDA
For the three and six months ended June 30, 2006 and 2007
(All figures in $’000s)
(Unaudited)
                                                 
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2006     2007     % Chg.     2006     2007     % Chg.  
 
                                                
Net income (loss)
   $ (2,652 )   $ 6,366             $ (2,787 )   $ 2,565          
Provision (benefit) for corporate income taxes
     (1,682 )     4,426               (664 )     1,784          
Loss on extinguishment of debt
     8,667       —               8,667       12,521          
Interest expense, net of interest income
     9,733       6,114               19,696       12,871          
Depreciation and amortization
     10,400       11,731               20,786       22,822          
 
                                        
EBITDA
   $ 24,466     $ 28,637       17.0 %   $ 45,698     $ 52,563       15.0 %
 
                                        
 
                                                
EBITDA Margin
     22.3 %     23.9 %             21.4 %     22.4 %        
Non GAAP Financial Measures:
EBITDA is defined as earnings before interest, taxes, depreciation and amortization and loss on extinguishment of debt. EBITDA provides useful information regarding the Company’s operating performance and financial condition, subject to the limitations described below. EBITDA should not be considered in isolation or as a substitute for net income, cash flows or other consolidated income (loss) or cash flow data prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) or as a measure of the Company’s profitability or liquidity. Additionally, investors should be aware that EBITDA may not be comparable to similarly titled measures presented by other companies. EBITDA margin is defined as EBITDA as a percentage of consolidated revenue.
The Company believes that EBITDA is used by some investors, analysts and other parties to measure the Company’s performance over time. Management believes that providing this additional information is useful in understanding the Company’s ability to meet capital expenditures and working capital requirements and to better assess and understand operating performance. The measure allows investors, analysts and other parties to better evaluate the Company’s financial performance and prospects in the same manner as management.
Forward-Looking Statements:
Statements in this release that do not constitute historical facts, including, without limitation, statements under the caption “2007 Business Outlook” and other statements regarding future financial results and performance and potential sales revenue are “forward-looking” statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, without limitation, statements under the caption “2007 Business Outlook,” other statements regarding future financial results and performance and potential sales revenue, other statements that are predictive in nature or depend upon or refer to events or conditions, or that include words such as “expects,” “anticipated,” “intends,” “plans,” “believes,” “estimates” or “could”. These forward-looking statements are subject to various risks and uncertainties, many of which are outside the Company’s control, including the level of market demand for the Company’s services, competitive pressures, the ability to achieve reductions in operating costs and to continue to integrate acquisitions, the application of federal and state tax laws and regulations, and other specific factors discussed herein and in other releases and public filings made by the Company (including Forms 10-K and 10-Q filed with the Securities and Exchange Commission); accordingly, actual results could differ materially from any such forward-looking statement. The forward-looking statements speak only as of the date hereof and the Company does not intend to update this information to reflect developments or information obtained after the date hereof and the Company disclaims any legal obligation to the contrary.